Raising serious questions over the integrity of India’s insolvency resolution framework, the Enforcement Directorate (ED) has arrested Arvind Kumar, former Resolution Professional (RP) of Richa Industries Limited, on charges of money laundering. The accused has been remanded to eight days of custody. The agency alleges that illicit funds were routed and projected as legitimate receipts under the guise of the Corporate Insolvency Resolution Process (CIRP), causing significant losses to public sector banks.
According to the ED, Arvind Kumar served as the Resolution Professional of Richa Industries from December 2018 to June 2025. During this period, substantial company funds were allegedly diverted to individuals and entities closely linked to him. Investigators claim that large sums were routed through intermediaries and eventually transferred back into Kumar’s personal bank accounts, making him a direct beneficiary of the Proceeds of Crime (PoC).
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Suspicious banking transactions flagged
The ED said an examination of bank records revealed unexplained cash deposits exceeding ₹80 lakh in Kumar’s personal accounts. In addition, credits of over ₹1 crore were traced to related parties who had earlier received payments from Richa Industries. The agency stated that these transactions do not correspond with legitimate professional fees or declared income sources.
Investigators said the pattern of fund movement indicates deliberate layering of corporate funds to disguise their origin and falsely present them as CIRP-related expenses.
Alleged violations of IBC provisions
The ED has further alleged that while acting as RP, Kumar deliberately failed to file mandatory avoidance applications under the Insolvency and Bankruptcy Code (IBC), despite audit reports clearly flagging preferential, undervalued, fraudulent and extortionate transactions. The agency claims this omission enabled the original perpetrators to retain and enjoy illicit proceeds.
‘Pro-promoter’ conspiracy alleged
According to the ED, Kumar allegedly colluded with former promoters of Richa Industries in what it described as a “pro-promoter” conspiracy. It is alleged that he forwarded ineligible resolution plans submitted by entities controlled by the promoter family and collected crores of rupees from interested parties on the pretext of selling company assets, without authorisation or proper documentation.
The agency said these actions directly contributed to massive losses for lenders. Following the liquidation of Richa Industries, banks reportedly recovered only ₹40 crore against admitted claims of ₹708 crore, translating into a 94% haircut.
Earlier arrests in the case
The ED has previously arrested the company’s former promoter and suspended managing director Sandeep Gupta in the same case. The probe is based on a First Information Report registered by the Central Bureau of Investigation, which alleged bank losses of ₹236 crore between 2015 and 2018.
RP registration suspended
In view of the alleged misconduct, the Insolvency and Bankruptcy Board of India (IBBI) had earlier suspended Arvind Kumar’s registration as a Resolution Professional for two years. The ED said the evidence gathered so far is substantial and further investigation could lead to additional disclosures.
The matter is currently before the court, and the investigation remains ongoing. The case has once again brought the spotlight on accountability, oversight and transparency within India’s insolvency resolution mechanism.
About the author – Ayesha Aayat is a law student and contributor covering cybercrime, online frauds, and digital safety concerns. Her writing aims to raise awareness about evolving cyber threats and legal responses.
